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February 17, 2000
Bay Area Restaurants Join the Net Set by Offering Free Reservations Online.
In a town where you can do everything but your laundry ever the Internet, making reservations by phone feels downright Victorian. Restaurants are finally catching up with the cyber age, offering free reservations through your computer. San Francisco’s OpenTable.com, which premiered in August, offers instantly confirmed reservations over the Internet. The site lists more than 120 participating restaurants that can be searched by name, neighborhood or cuisine type. Once you select a time and table size, the service reserves a table and e-mails you a confirmation.
Customers get the convenience of browsing dining options from their desktops, while restaurants benefit by being able to accept reservations 24 hours a day and getting free advertising through their listing on the site.
Azie, an upscale Asian/French fusion restaurant South of Market, opened two months ago with the system in place. So far, general manager Joe Hargrave has been impressed.
"There have been a few glitches with the technology," he said, "but it’s a fantastic idea. I imagine seeing it in most restaurants in a few years."
Restaurants replace their paper or computerized reservation books with an electronic "book"- a touch-screen computer slightly smaller than a laptop. OpenTable.com installs the book as part of the initial setup, which costs restaurants around $1,000. Restaurants pay a subscription fee of $100 a month, plus $1 per kept reservation.
The electronic book keeps track of all the tables. Reservations made through the Web site automatically appear in the book, and employees add reservations taken over the phone.
OpenTable’s goal is a faster and more useful reservation process for diners and restaurants. Customers can read reviews from other diners, browse cuisine descriptions, specify if the occasion is a special event like an anniversary, request a specific table and indicate dietary needs.
And restaurants can create files from diners, noting if they’re friends with the chef, prefer red wine or always order a certain dish. A section for comments by restaurant employees can be updated after each visit.
"The biggest benefit to restaurants, aside from cutting down the amount of phone calls, is the ability to track customers," said site founder Chuck Templeton, who spent six years waiting tables and bartending before entering the tech field. The idea for OpenTable.com came to him one Saturday morning as he watched his wife spend 3 1/2 hours trying to make reservations for their visiting in-laws.
"For a town that uses the Internet so much, and goes out to eat so much, it seemed natural," he said. Templeton funded the site with $50,000 of his savings. Later investing came from individual "angel" investors and venture capitalists, who have so far plugged more than $15 million into the business.
Templeton said that many restaurants are initially hesitant to adopt the technology because it means giving up their tried-and-true, pencil-and-paper method. They fear losing the intimacy and personal contact of the phone system, where receptionists can recognize VIP customers and adjust their definition of "completely booked" accordingly.
But he counters that the potential for tracking customers ultimately makes the system more personal. Templeton envisions restaurants keeping detailed databases on each diner and tailoring service accordingly.
Restaurants may be able to reduce the number of no-shows, which can cost them up to 10 percent of their tables. While OpenTable.com has only analyzed the databases of three participating restaurants so far, they say no-show rates can be reduced to 2 percent.
Azie’s Hargrave agrees that the service, which e-mails customers a reminder the day before their reservation cuts down on empty tables, but more importantly, allows restaurants to identify chronic no-shows. "If I notice that a person makes a habit of booking a table for two and not showing up, I might double-book that table the next time I see their name," he said.
Templeton said the site also brings new business to restaurants – 51 percent of users said they were visiting their chosen restaurant for the first time. Because the site is searchable by many variables, such as cuisine and location (with a price feature in the works), diners may take a chance on an unfamiliar restaurant if it has a table at the right time.
The service is free to users, but credit card numbers are required. Restaurants have the option of charging a fee for missed reservations but won’t charge users without their knowledge.
Currently operating in five cities –Seattle, Portland, New York, Chicago and San Francisco – OpenTable plans to go nationwide by the end of the year.
OpenTable.com plans to penetrate the restaurant market through partnerships with established brands. OpenTable has teamed up with American Express and the Zagat restaurant guides, offering Zagat reviews on its site and its reservation system on the Zagat site.
But even the most personalized, easy-to-use system will fail if hungry diners don’t get their tables.
"It’s not perfect yet," said Hargrave. "The human component of it means there will be some mistakes. We’re learning about it through trial and error."
Templeton is going through the same process. "One customer showed up and the restaurant had gone out of business," he recalled. "Now we make sure the restaurants tell us if they close."
© Copyright 2000, San Francisco Chronicle
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